-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J4ptyHrXK3NQNT79n5osXp2gYGtsR+xSlC5luYzRHZk61iJvi9N2IQYBdZN5O8m0 IxZkDLKEs6OPkpmrE3V2vA== 0001050502-98-000182.txt : 19980716 0001050502-98-000182.hdr.sgml : 19980716 ACCESSION NUMBER: 0001050502-98-000182 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980531 FILED AS OF DATE: 19980715 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PYR ENERGY CORP CENTRAL INDEX KEY: 0001016289 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 954580642 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-20879 FILM NUMBER: 98666758 BUSINESS ADDRESS: STREET 1: 1675 BROADWAY STREET 2: STE 1150 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3038253748 MAIL ADDRESS: STREET 1: 17337 VENTURA BOULEVARD STREET 2: SUITE 224 CITY: ENCINO STATE: CA ZIP: 91316 FORMER COMPANY: FORMER CONFORMED NAME: MAR VENTURES INC DATE OF NAME CHANGE: 19960606 10QSB 1 FORM 10-QSB U.S. Securities And Exchange Commission Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 1998 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_________________ to_________________ Commission File No. 0-20879 PYR ENERGY CORPORATION ---------------------- (Exact name of small business issuer as specified in its charter) Delaware 95-4580642 -------- ---------- (State or jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1675 Broadway, Suite 1150, Denver, CO 80202 ------------------------------------- ----- (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code (303) 825-3748 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No___ (APPLICABLE ONLY TO CORPORATE REGISTRANTS) The number of shares outstanding of each of the issuer's classes of common equity as of July 14, 1998 is as follows: $.001 Par Value Common Stock 9,154,804 --------- PYR ENERGY CORPORATION FORM 10-QSB INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements.......................................... 3 Balance Sheet - May 31, 1998 and August 31, 1997.............. 3 Statement of Operations - Quarter Ended and Nine Months Ended May 31, 1998 and May 31, 1997................................. 4 Statement of Cash Flows - Nine Months Ended May 31, 1998 and May 31, 1997.............................................. 5 Notes to Financial Statements................................. 6 Summary of Significant Accounting Policies.................... 6 Item 2. Management's Discussion and Analysis or Plan of Operation..... 8 PART II. OTHER INFORMATION Item 1. Legal Proceedings............................................. 12 Item 2. Changes in Securities......................................... 12 Item 3. Defaults Upon Senior Securities............................... 12 Item 4. Submission of Matters to a Vote of Security Holders........... 12 Item 5. Other Information............................................. 12 Item 6. Exhibits and Reports on Form 8-K.............................. 12 Signatures............................................................. 12 2 PART I ITEM 1. FINANCIAL STATEMENTS PYR ENERGY CORPORATION (A Development Stage Company) BALANCE SHEETS ASSETS 5/31/98 8/31/97 (UNAUDITED) CURRENT ASSETS Cash $ 303,829 $ 1,432,281 Accounts receivable -- 10,000 Other receivables 191,600 -- Deposits and prepaid expenses 76,449 4,196 ----------- ----------- Total Current Assets 571,878 1,446,477 ----------- ----------- PROPERTY AND EQUIPMENT, at cost Furniture and equipment, net 61,159 28,540 Undeveloped oil and gas prospects 1,871,240 311,007 ----------- ----------- 1,932,399 339,547 ----------- ----------- OTHER ASSETS, net 3,642 3,642 ----------- ----------- $ 2,507,919 $ 1,789,666 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 11,365 $ 60,064 Accrued and other liabilities 723,120 10,184 ----------- ----------- Total Current Liabilities 734,485 70,248 ----------- ----------- Capital lease obligation 3,173 -- ----------- ----------- Total Liabilities 737,658 70,248 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock, $.001 par value Authorized 30,000,000 shares Issued and outstanding - 9,154,804 shares 9,155 9,155 Capital in excess of par value 1,768,088 1,768,088 Retained earnings/(accumulated deficit) (6,982) (57,825) ----------- ----------- 1,770,261 1,719,418 ----------- ----------- $ 2,507,919 $ 1,789,666 =========== =========== 3
PYR ENERGY CORPORATION (A Development Stage Company) STATEMENTS OF OPERATIONS (UNAUDITED) Three Three Nine Nine Months Months Months Months Inception Ended Ended Ended Ended Through 5/31/98 5/31/97 5/31/98 5/31/97 5/31/98 REVENUES Consulting Fees $ -- $ 40,000 $ 10,000 $ 87,528 $ 127,528 Interest 5,174 -- 31,719 -- 37,315 Gain on asset sale -- -- 556,197 -- 556,197 ----------- ----------- ----------- ----------- ----------- 5,174 40,000 597,916 87,528 721,040 OPERATING EXPENSES General and administrative 163,343 7,216 524,633 35,325 668,312 Interest -- -- 217 -- 568 Depreciation and amortization 6,223 253 15,983 334 17,034 ----------- ----------- ----------- ----------- ----------- 169,566 7,469 540,833 35,659 685,914 INCOME/(LOSS) BEFORE INCOME TAXES (164,392) 32,531 57,083 51,869 35,126 Income Taxes -- -- 6,240 -- 6,240 ----------- ----------- ----------- ----------- ----------- (164,392) 32,531 50,843 51,869 28,886 INCOME APPLICABLE TO PREDECESSOR LLC -- (32,531) -- (51,869) (35,868) ----------- ----------- ----------- ----------- ----------- NET INCOME/(LOSS) $ (164,392) $ -- $ 50,843 $ -- $ (6,982) =========== =========== =========== =========== =========== NET INCOME/(LOSS) PER COMMON SHARE $ (.018) $ .008 $ .006 $ .013 $ .005 =========== =========== =========== =========== =========== COMMON SHARES OUTSTANDING 9,154,804 4,000,000 9,154,804 4,000,000 6,097,228 4
PYR ENERGY CORPORATION (A Development Stage Company) STATEMENTS OF CASH FLOWS (UNAUDITED) Cumulative Nine Months Nine Months from Inception Ended 5/31/98 Ended 5/31/97 to 5/31/98 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 50,843 $ 51,869 $ 28,886 Adjustments to reconcile net income (loss) to net cash provided by operating activities Gain on sale of assets (556,197) (556,197) Depreciation and amortization 15,983 334 17,034 Changes in assets and liabilities (Increase)/decrease in receivables (181,600) -- (191,600) (Increase)/decrease in deposits and prepaids (72,253) (2,500) (76,449) Increase/(decrease) in accounts payable (48,699) 1,628 11,365 Increase/(decrease) in accrued and other liabilities (2,564) (15,001) 7,620 Other -- (3,705) (3,750) ----------- ----------- ----------- Net cash provided/(used) by operating activities (794,577) 38,330 (763,091) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of oil and gas interests 1,050,078 -- 1,050,078 Cash paid for furniture and equipment (48,602) (3,340) (78,085) Cash paid for undeveloped oil and gas assets (1,338,632) -- (1,649,729) ----------- ----------- ----------- Net cash provided/(used) in investing activities (337,156) (3,340) (677,736) ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Members capital contributions -- 4,000 64,000 Distributions to members -- (36,200) (66,000) Net proceeds from capital lease obligation 3,281 -- 3,281 Cash from short-term borrowings -- -- 285,000 Repayments of short-term borrowings -- -- (285,000) Proceeds from sale of common stock -- -- 2,023,750 Cash paid for offering costs -- -- (280,711) Cash received upon recapitalization and merger -- -- 336 ----------- ----------- ----------- Net cash (used) provided by financing activities 3,281 (32,200) 1,744,656 ----------- ----------- ----------- NET INCREASE/(DECREASE) IN CASH (1,128,452) 2,790 303,829 CASH, BEGINNING OF PERIODS 1,432,281 -- -- ----------- ----------- ----------- CASH, END OF PERIODS $ 303,829 $ 2,790 $ 303,829 =========== =========== =========== 5
PYR ENERGY CORPORATION (A Development Stage Company) Notes to Financial Statements May 31, 1998 The accompanying interim financial statements of PYR Energy Corporation (the "Company") are unaudited. In the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim period. The financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Management believes the disclosures made are adequate to make the information not misleading and recommends that these condensed financial statements be read in conjunction with the financial statements and notes included in the Company's Form 10-KSB as of August 31, 1997. PYR Energy Corporation (formerly known as Mar Ventures Inc. ("Mar")) was incorporated under the laws of the State of Delaware on March 27, 1996. Mar had been a public company which had no significant operations as of July 31, 1997. On August 6, 1997 Mar acquired all the interests in PYR Energy LLC ("PYR LLC") (a Colorado Limited Liability Company organized on May 31, 1996), a development stage company as defined by Statement of Financial Accounting Standards (SFAS) No. 7. PYR LLC, an independent oil and gas exploration company, had been engaged in the acquisition of oil and gas properties for exploration and exploitation in the Rocky Mountain region and California. As of August 6, 1997 PYR LLC had acquired only non-producing leases and acreage and no exploration had been commenced on the properties. Upon completion of the acquisition of PYR LLC by Mar, PYR LLC ceased to exist as a separate entity. Mar remained as the legal surviving entity and, effective November 12, 1997, Mar changed its name to PYR Energy Corporation. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. CASH EQUIVALENTS - For purposes of reporting cash flows, the Company considers as cash equivalents all highly liquid investments with a maturity of three months or less at the time of purchase. At May 31, 1998, there were no cash equivalents. 6 PROPERTY AND EQUIPMENT - Furniture and equipment is recorded at cost. Depreciation is provided by use of the straight-line method over the estimated useful lives of the related assets of three to five years. Expenditures for replacements, renewals, and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. OIL AND GAS PROPERTIES - The Company follows the full cost method to account for its oil and gas exploration and development activities. Under the full cost method, all costs incurred which are directly related to oil and gas exploration and development are capitalized and subjected to depreciation and depletion. Depletable costs also include estimates of future development costs of proved reserves. Costs related to undeveloped oil and gas properties may be excluded from depletable costs until such properties are evaluated as either proved or unproved. The net capitalized costs are subject to a ceiling limitation. Gains or losses upon disposition of oil and gas properties are treated as adjustments to capitalized costs, unless the disposition represents a significant portion of the Company's proved reserves. A separate cost center is maintained for expenditures applicable to each country in which the Company conducts exploration and/or production activities. Undeveloped oil and gas properties consists primarily of leases and acreage acquired by the Company for its exploration and development activities. The cost of these non-producing leases is recorded at the lower of cost or fair market value. The Company has adopted SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of" which requires that long-lived assets to be held and used be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The adoption of SFAS 121 has not had an impact on the Company's financial statements, as the Company has determined that no impairment loss through May 31, 1998 need to be recognized for applicable assets of continuing operations. ORGANIZATION COSTS - Costs related to the organization of the Company have been capitalized and are being amortized over a period of five years. INCOME TAXES - The Company has adopted the provisions of SFAS No. 109, "Accounting for Income Taxes". SFAS 109 requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Company is an independent oil and gas exploration company whose strategic focus is the application of advanced seismic imaging and computer-aided exploration technologies in the systematic search for commercial hydrocarbon reserves, primarily in the onshore western United States. The Company attempts to leverage its technical experience and expertise with 3-D seismic to identify exploration and exploitation projects with significant potential economic return. The Company intends to participate in selected exploration projects as a non-operating, working interest owner, sharing both risk and rewards with its partners. The Company has and will continue to pursue exploration opportunities in regions where the Company believes significant opportunity for discovery of oil and gas exists. By reducing drilling risk through 3-D seismic technology, the Company seeks to improve the expected return on investment in its oil and gas exploration projects. During the nine months and quarter ended May 31, 1998, the Company incurred approximately $2,054,000 and $1,657,000 respectively, for acquisition of acreage, direct geological and geophysical costs, drilling costs and other related direct costs with respect to its identified exploration and exploitation projects. During the quarter ended May 31, 1998, the Company commenced drilling operations with an initial exploration well on its Mastiff prospect at East Lost Hills in California. The Company has prepaid a total of $156,000 for its share of the cost of this well. As of the date of this report, this well continues to drill toward the total depth of 19,000 feet. The Company has had no revenues from oil and gas production. The Company currently anticipates that it will participate in the drilling of two to four additional exploratory wells during the next twelve months, although the number of wells may increase as additional projects are added to the Company's portfolio. However, there can be no assurance that any such wells will be drilled and if drilled that any of these wells will be successful. The Company currently has three active projects in the Southern San Joaquin Basin of California: East Lost Hills - The Company signed a joint operating agreement with seven established US and Canadian oil and gas exploration companies to participate in the drilling of a deep wildcat well to evaluate the Company's Mastiff prospect at East Lost Hills. The Mastiff well was spud on May 14, 1998 and is projected to reach its target depth of 19,000 feet by mid-September. The Company currently owns an approximate 10.38% working interest in this well. PYR and its partners control approximately 23,000 acres over this prospect. School Road - On May 29, 1998, the Company signed a participation agreement with Seneca Resources Corporation for the drilling of PYR's Rainbow 'Stevens' exploration prospect in this area. Seneca, which is the oil and gas subsidiary of National Fuel Gas Company, will operate. The Rainbow exploration well is anticipated to spud in July, and is expected to take 30 to 45 days to reach total depth of 12,500 feet. This well is being 8 drilled to test multiple Upper Miocene, 'Stevens' sands in a combination structural/stratigraphic feature defined by 3-D seismic data. Similar 'Stevens' sand reservoirs typically produce light oil (28 to 42 degree API gravity) and associated natural gas. The Rainbow prospect is one of four prospects identified and mapped by the Company from 3-D seismic data within the School Road project. Although there can be no assurance, PYR and Seneca may drill a second prospect around the end of calendar year 1998. PYR retained an ultimate 40% working interest at School Road and as a result of the agreement with Seneca, will have no obligation to fund any drilling or completion costs toward the initial exploration well. Southeast Maricopa - The Company has completed acquisition of approximately 52 square miles of 3-D seismic data over its Southeast Maricopa project. Western Geophysical acted as seismic contractor for the data acquisition. The Company has prepaid a total of $662,500 toward the total acquisition cost of $1,378,000. Permitting, location damages and processing are expected to add as much as $300,000 to the total cost of this project. The Company currently holds a 100% working interest and has identified a number of prospect leads based on 2-D seismic data. The 3-D seismic data is expected to further refine some of these leads into drillable prospects. The Company may present this project to potential industry partners in order to sell an appropriate portion in order to limit or eliminate financial risk associated with exploratory drilling and to potentially recapture some or all of the initial investment. The Company projects drilling an initial exploratory test well here before the end of calendar year 1998. The Company has other projects identified in the Denver Basin of Colorado and Nebraska, the Williston Basin of North Dakota and in the Big Horn Basin of Wyoming and Montana. The Company is currently identifying specific areas to begin leasing acreage with the intent of drilling at least one exploration well as soon as appropriate funding (of which there is no assurance) has been obtained. In addition, the Company continues to identify and evaluate acquisition opportunities for exploration and exploitation opportunities. The Company's cash balance at May 31, 1998 was $303,829. Also at May 31, 1998, the Company had outstanding warrants to issue 2,047,500 shares of its common stock at $1.75 per share. These Warrants were to expire on June 30, 1998. The Company has elected to extend the expiration date of these Warrants to July 31, 1998 and has adjusted the exercise price to $.85. To the extent that these warrants expire without being exercised, the Company may be limited in its ability to continue to fund its exploration and exploitation activities until additional financing is available. Although the Company currently has no committed sources for funding of its capital expenditures, the Company continues to seek additional sources of capital. The Company has no outstanding long-term debt and although it has no current plan to do so, it may incur long-term debt in the future in order to fund development of oil and gas producing properties. 9 Results of Operations The nine months ended May 31, 1998 compared with the nine months ended May 31, 1997 Operations during the nine months ended May 31, 1998 resulted in net income of $51,869 compared to net income of $50,843 for the nine months ended May 31, 1997. Partial Sale of Undeveloped Oil and Gas Property. During the nine months ended May 31, 1998, the Company sold a portion of its East Lost Hills project to industry partners for a total of $850,078 resulting in a net gain from the sale of $556,197. The Company has retained a working interest in this project. Oil and Gas Revenues and Expenses. The Company has not owned any producing or proved oil and gas properties. Accordingly, no oil and gas revenues or expenses have been recorded by the Company. Depreciation, Depletion and Amortization. The Company recorded no depletion expense from oil and gas properties for the nine months ended May 31, 1998 or 1997. The Company has not owned any proved reserves and had no oil or gas production. The Company recorded $15,983 and $334 in depreciation expense associated with capitalized office furniture and equipment during the nine months ended May 31, 1998 and 1997, respectively. General and Administrative Expense. The Company incurred $524,633 and $35,325 in general and administrative expenses during the nine months ended May 31, 1998 and 1997, respectively. The increase results from incurring costs associated with the hiring of technical personnel, leasing of office space, legal and accounting costs relating to the Company's transition to a public company and other costs associated with administering and pursuing the development of the Company's exploration and exploitation plan. Consulting Fee Revenue. The Company generated $10,000 and $87,528 from consulting fees during the nine months ended May 31, 1998 and 1997, respectively. These revenues are considered to be ancillary to the Company's focus of generating revenues from oil and gas production. These revenues have ceased and are not expected to occur in the future. The quarter ended May 31, 1998 compared with the quarter ended May 31, 1997 Operations during the quarter ended May 31, 1998 resulted in a net loss of ($164,392) compared to net income of $32,531 for the quarter ended May 31, 1997. Oil and Gas Revenues and Expenses. The Company has not owned any producing or proved oil and gas properties. Accordingly, no oil and gas revenues or expenses have been recorded by the Company. 10 Depreciation, Depletion and Amortization. The Company recorded no depletion expense from oil and gas properties for the quarters ended May 31, 1998 or 1997. The Company has not owned any proved reserves and had no oil or gas production. The Company recorded $6,223and $253 in depreciation expense associated with capitalized office furniture and equipment during the quarters ended May 31, 1998 and 1997, respectively. General and Administrative Expense. The Company incurred $163,343 and $7,216 in general and administrative expenses during the quarters ended May 31, 1998 and 1997, respectively. The increase results from incurring costs associated with the hiring of technical personnel, leasing of office space, and legal and accounting relating to the Company's transition to a public company and other costs associated with administering and pursuing the development of the Company's exploration and exploitation plan. Consulting Fee Revenue. The Company generated $0 and $40,000 from consulting fees during the quarters ended May 31, 1998 and 1997, respectively. These revenues are considered to be ancillary to the Company's focus of generating revenues from oil and gas production. These revenues have ceased and are not expected to occur in the future. (Intentionally left blank) 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K During the quarter ended May 31, 1998, the Registrant filed four reports on Form 8-K: A Form 8K was filed on March 4, 1998 reporting a press release dated March 2, 1998, A Form 8K was filed on March 25, 1998 reporting a press release dated March 19, 1998, A Form 8K was filed on April 27, 1998 reporting a press release dated April 20, 1998 and A Form 8K was filed on May 18, 1998 reporting a press release dated May 15, 1998. SIGNATURES ---------- In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PYR ENERGY CORPORATION Signatures Title Date ---------- ----- ---- /s/ D. Scott Singdahlsen Chief Executive Officer; President July 15, 1998 - ------------------------ and Chairman Of The Board D. Scott Singdahlsen /s/ Andrew P. Calerich Chief Financial Officer July 15, 1998 - ------------------------ Andrew P. Calerich 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS 9-MOS AUG-31-1998 AUG-31-1998 MAR-01-1998 SEP-01-1997 MAY-31-1998 MAY-31-1998 303,829 303,829 0 0 191,600 191,600 0 0 0 0 571,878 571,878 1,932,399 1,932,399 0 0 2,507,919 2,507,919 734,485 734,485 0 0 0 0 0 0 9,155 9,155 1,761,106 1,761,106 2,507,919 2,507,919 0 0 5,174 597,916 0 0 169,566 540,833 0 0 0 0 0 0 (164,392) 57,083 0 6,240 (164,392) 50,843 0 0 0 0 0 0 (164,392) 50,843 (.018) .006 (.018) .006
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